Nicolas Sarkozy has declared there are too many foreigners in France, deliberately using the rhetoric of the extreme right to regain ground in his difficult re-election battle.

The French president made a three-hour appearance on a TV politics debate show on Monday night, vowing to cut immigration by half and limit state benefits for legal migrants. "Our system of integration is working increasingly badly, because we have too many foreigners on our territory and we can no longer manage to find them accommodation, a job, a school," he said.

Sarkozy, who continues to lag behind the Socialist frontrunner, François Hollande, is more than ever positioning his campaign to the hard right, to court voters from Marine Le Pen's extreme-right Front National. But the tactic appeared to have backfired this week as he was attacked by religious leaders and some within his own party for stoking anti-Muslim sentiment by forcing the marginal topic of halal meat into the centre of his election campaign.

In what some newspaper columnists called "sick-making" and "grotesque" electioneering, Sarkozy pushed fears of a supposed secret Islamisation of French people's dinner plates. He reopened a row, begun last month by Le Pen, over whether meat ritually slaughtered according to Muslim religious standards was being sold on the wider market to unsuspecting non-Muslim consumers.

As part of a marked tilt to the right in a bid to woo voters away from Ms Le Pen and bolster his weak opinion poll showing, Mr Sarkozy and two of his most senior ministers have angered Muslim and Jewish leaders by raising questions in recent days over the production of halal and kosher meat.

François Fillon, the prime minister, has agreed to see the chief rabbi of France on Wednesday in an effort to cool the temperature. Nathalie Kosciusko-Morizet, Mr Sarkozy's top campaign spokeswoman, said on Tuesday that the reaction had been "disproportionate".

The issue first erupted when Ms Le Pen alleged last month that "100 per cent" of meat slaughtered in the Ile de France region around Paris was produced according to halal rules. At first, Mr Sarkozy dismissed the claim, but it subsequently became clear that a number of slaughterhouses did produce only under halal or kosher rules, preferring to stick to one process chiefly for reasons of cost.

The EU commission on Wednesday (7 March) gave Hungary a one-month deadline to change its controversial laws or face court cases in Luxembourg, just as Budapest is struggling to secure a loan from international lenders.

Reassurances by Hungarian Prime Minister Viktor Orban that his government is not trying to expand political control over judges, data protection authorities and the central bank were deemed insufficient for the commission to drop its case, a commission spokeswoman said.

As part of the legal action, the commission on Wednesday sent two so-called reasoned opinions with a one-month deadline concerning laws on the judiciary and data protection authority. Budapest will be sent to the European Court of Justice for breaching EU law if it does not alter some of their provisions, such as moving judges from one court to another against their will or allowing the state president to keep some of them in office past retirement age, which is seen as political meddling.

As for concerns about the independence of the central bank - a key condition for Budapest to receive a 20bn loan from the EU and the International Monetary Fund - economics commissioner Olli Rehn will send a letter requesting further information before pursuing legal action, the spokeswoman said.

"The conditions are not yet met. We need clarification and settlement before any talks can start," Pia Ahrenkilde said in reference to the EU-IMF talks with Budapest suspended in December due to the central bank law.

Vladimir Putin on Wednesday suggested a seat in the cabinet for his reform-minded rival Mikhail Prokhorov but vehemently rejected opposition claims of fraud in his crushing poll win.

His comments came as anti-Putin forces prepared to regroup at a mass rally in the heart of Moscow on Saturday that the city said would be allowed to draw up to 50,000 people -- the largest such protest in a month.

The Russian strongman had until now said little about his return to a third term in the Kremlin and gave few indications on Wednesday about whether he was ready to offer concessions to the first protest movement of his 12-year rule.

He said the billionaire Prokhorov -- owner of the NBA's New Jersey Nets and an independent at the polls who came in a surprise third with eight percent of the vote -- would be welcome in his new cabinet.

Vladimir Putin's spokesperson yesterday defended police action against protestors decrying the Russian politician's presidential election victory, as final results showed that in some parts of Chechnya, Mr Putin had polled an improbable 99.89 percent of the vote.

Dmitry Peskov, the Prime Minister's spokesman, said that the police had shown "a high level of professionalism, legitimacy and effectiveness" in their handling of the event at Pushkin Square on Monday night. After the majority of the 20,000 crowd had dispersed, several hundred people remained on the square and were dragged away by riot police and detained. The police response and Mr Peskov's remarks appear to be meant as a clear signal to the opposition that they will only be allowed to protest in "authorised" places and times.

All of the 250 arrested, including leaders Alexei Navalny and Ilya Yashin, were released within a few hours, and leaders of the informal opposition coalition to Mr Putin are now trying to formulate a strategy to ensure the protest voice does not fade as Russia's longest-standing post-Soviet leader prepares to begin a new six-year presidential term in May.

Russia is hard on its children, and Yelizaveta Petsylya and Anastasia Korolyova finally decided, at the age of 14, to do what thousands of other Russian teenagers have done. There was one way to assert control over their lives, and that was to end them.

Russia has the third-highest teenage suicide rate in the world, just behind its neighbors Belarus and Kazakhstan and more than three times that of the United States. On an average day, about five Russians under age 20 take their own lives.

Psychiatrists and health experts here know why it happens. Alcohol abuse, domestic violence and rigid parenting all play a role. Too many parents expect unquestioning obedience. Social conformity is strictly enforced, especially outside the big cities. Isolation is a huge problem in such a large country. There's rarely anywhere to turn for help -- but even if there were, families would be unlikely to admit their failings to outsiders.

Suicide is an attempt to seek relief from all that, by taking charge. The two teens, called Liza and Nastya by their families and friends, left letters behind: They wanted to wear white dresses and be buried in white coffins, and in death their wishes were honored.

The governor loves to hunt -- geese, rabbits, fox, whatever happens to cross his path. Luis Durnwalder, the top hunter in South Tyrol, grants hunting licenses as if he were the lord of the manor, and when farmers in Vinschgau complain that the deer are ruining their fields, he issues a direct order to his hunters: Shoot seven deer, right away!

OAS_RICH('Middle2'); The Italian government could have guessed that it would only make enemies in Bolzano when it filed a complaint against the state hunting law in South Tyrol before the Italian Constitutional Court. Rome doesn't like the fact South Tyrol doesn't adhere to the hunting season mandated for all Italian provinces.

None of Rome's business, says Durnwalder. He points out that Sicily and South Tyrol are so different in terms of flora and fauna that it isn't possible "to apply the same law from the Brenner Pass to Sicily."

Italian Prime Minister Mario Monti disagrees. He wants to prove that Europe can rely on Italy. To that end, his cabinet of technocrats has assembled a package of reforms that also makes additional demands on the five Italian regions with semi-autonomous status -- even down to legal details regulating the damage done by wildlife.

Money is at the core of the dispute. South Tyrol is expected to contribute 120 million ($161 million) to cleaning up the Italian national budget. To do so, it will have to raise real estate, value-added and income taxes, as well as fees paid by farmers -- measures that violate Rome's promise that 90 percent of the taxes collected in South Tyrol will stay in South Tyrol. On an almost daily basis, Durnwalder cites paragraphs from the reform package against which he intends to make his own case before the Constitutional Court.

Large banks and pension funds came out in support of the Greek bond swap, making it more likely that the deal will pass; some hedge funds, and several Greek pension funds are still holding out; the Greek government says it will default on the holdouts, but some investors dispute whether this is true; some hedge funds are betting that they get enough support for a legal procedure; Nouriel Roubini says bond holders should accept what is ultimtately a very sweet deal for them; Reuters Breakingviews says defaulting on the holdouts is no big deal; Pasok employees were protesting over unpaid wages; Bild criticises new Greek military purchases; Francois Hollande says he will make specific proposal to amend the fiscal compact; Angela Merkel rules out an increase in the ESM's ceiling, but is open to letting the EFSF and ESM run concurrently; Spanish home sales drop 30% last year; Jurgen Stark expresses misgivings about the size and quality of the ECB's balance sheet; German industrial orders fall sharply due to a lack of demand from within the eurozone; Bavaria's CSU wants monthly updates on the risks to the German taxpayers; Wolfgang Proissl says Jens Weidmann should stop criticising decisions he himself has supported in the ECB's governing council; Wolfgang Munchau argues that Hans-Werner Sinn's analysis on the Target 2 imbalances is correct, but he disagrees with the conclusions; Olaf Sievert, meanwhile, writes an open letter criticising Hans-Werner Sinn for suggesting policies to restrain the payment flows.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

Talking to Frankfurter Allgemeine Zeitung, Jürgen Stark said the ECB's balance sheet was of very doubtful quality. ,,The balance sheet of the eurosystem is not only gigantic in its dimension but also its quality is appalling", the ECB's former chief economist said. But Stark also criticized the balance sheet's structure pointing out that more and more short term debt had been replaced by long term debt which would make more difficult to exit the currently very loose monetary policy stance. Stark's criticism is likely to further fuel the debate in today's Governing Council meeting, after Jens Weidmann criticized the ECB's current strategy as too risky in a leaked letter to Mario Draghi last week. The ECB's balance sheet recently surpassed the volume of 3tr. Specialists point out that while the Fed's balance sheet had grown even more dramatically, the quality of the debt on the Fed's balance sheet is of a better quality than in the case of the ECB after its decision in February that some central banks can accept credit claims that are significantly below investment grade.

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Wolfgang Proissl calls on Weidmann to stop sniping at the ECB's crisis policy

In a comment for Financial Times Deutschland Wolfgang Proissl points out that Mario Draghi told the EU heads and state of government last week that there would not be a third round of 3y LTRO thus signalling an exit from the ECB's ultra-generous provision of liquidity. Proissl asks Jens Weidmann to use today's Governing Council meeting to announce his own exit from publically criticizing ECB decisions he previously voted in favour of, as he did with his leaked letter in which he criticised the risks resulting from the 3y LTRO and the loosening of the collateral framework. In order to do so, Weidmann must break the still strong position of the Bundesbank's old guard and transform the German central bank into a strong and constructive part of the eurosystem. Succeeding in this endeavour would be a historic accomplishment for Weidmann, Proissl says.

the Bundesbank appears to be weakened by division and isolation, Financial Times Deutschland and Handelsblatt report. FTD writes that the leaked letter had provoked internal tensions in the central bank. Pragmatists had argued that it should focus on a strategy to get out of the ultra-generous liquidity measures. The hard liners on the other hand had insisted that the letter should contains proposals about additional collateral from the euro crisis countries to the ECB in order to cover the risks emerging from the ever increasing Target balances in the central banks of surplus countries such as the Bundesbank. The Bundesbank's claim that the leak was not done with Weidmann's knowledge or approval is not reassuring to the ECB and other euro central banks. The reason is that it implies that Weidmann is not in control of his institution and that there are powerful forces inside the Bundesbank working against him.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

It is difficult to think of a more self-defeating way to implement a bond-purchase program. By making it clear from the outset that it did not trust its own policy, the ECB practically guaranteed its failure. If it so evidently lacked confidence in the very bonds that it was buying, why should investors feel any differently?

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Perhaps the most astonishing thing about the ECB's monochromatic price-stability mission and utter disregard for financial stability - much less for the welfare of the workers and businesses that make up the economy - is its radical departure from the central-banking tradition. Modern central banking got its start in the collapse of the British canal boom of the early 1820's. During the financial crisis and recession of 1825-1826, a central bank - the Bank of England - intervened in the interest of financial stability as the irrational exuberance of the boom turned into the remorseful pessimism of the bust.

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Our current political and economic institutions rest upon the wager that a decentralized market provides a better social-planning, coordination, and capital-allocation mechanism than any other that we have yet been able to devise. But, since the dawn of the Industrial Revolution, part of that system has been a central financial authority that preserves trust that contracts will be fulfilled and promises kept. Time and again, the lender-of-last-resort role has been an indispensable part of that function.

That is what the ECB is now throwing away.

Note the date: it was a farewell shot at Trichet.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman